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Turkey embraces Islamic finance with sovereign sukuk
September 20, 2012--Turkey's issue of its first sovereign sukuk this week paves the way for Turkish companies to raise money through Islamic bonds, and may help the country become a major market for Islamic investors from the Gulf and Southeast Asia.
After coming to power a decade ago, Prime Minister Tayyip Erdogan's government, which espouses Islamic values, largely shied away from Islamic finance for fear of opening itself to charges that it was trying to roll back state secularism. This prevented the world's eighth most populous Muslim nation from participating fully in rapid growth of the industry. Islamic financial assets globally hit $1.3 trillion in 2011, a 150 percent increase over five years, according to an estimate by lobby group TheCityUK's UK Islamic Finance Secretariat.
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Source: Today's Zaman
Quantitative impact study results published by the Basel Committee
September 20, 2012--The Basel Committee published today the results of its Basel III monitoring exercise.
The study is based on rigorous reporting processes set up by the Committee to periodically review the implications of the Basel III standards for financial markets; the first results of the exercise based on June 2011 data had been published in April 2012. A total of 209 banks participated in the study, including 102 Group 1 banks (ie those that have Tier 1 capital in excess of €3 billion and are internationally active) and 107 Group 2 banks (ie all other banks).
While the Basel III framework sets out transitional arrangements to implement the new standards, the monitoring exercise results assume full implementation of the final Basel III package based on data as of 31 December 2011 (ie they do not take account of the transitional arrangements such as the phase in of deductions). No assumptions were made about bank profitability or behavioural responses, such as changes in bank capital or balance sheet composition. For that reason the results of the study are not comparable to industry estimates.
view the Results of the Basel III monitoring exercise as of 31 December 2011
Source: BIS
Eurozone business activity gloomiest in three years
September 20, 2012--Eurozone private sector business activity declined for an eighth straight month in September, hitting its gloomiest patch in three years as French activity plunged, a survey showed Thursday.
The closely-watched Purchasing Managers Index (PMI), a survey of 5,000 eurozone businesses compiled by Markit research firm and a key forward-looking indicator, came in at 45.9 points, down from 46.3 in July.
Any reading below 50 indicates contraction in activity.
Taken together with previous months the data suggested "the worst quarter for three years," Chris Williamson, Markit chief economist said in a statement.
He tipped a 0.6 percent contraction in gross domestic product for the quarter, which would confirm a return to recession.
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Source: EUbusiness
DB-Global Equity Index and ETF Research-Weekly European ETF Market Monitor: European equity ETFs continue to attract strong interest
September 19, 2012--European broad equity benchmarked ETFs continue to attract strong interest
Equity ETFs: A market rally draws investors
Global ETF cash flow patterns for the week that finished on September 14th signal an improvement in equity market sentiment. US domiciled ETFs received €14.2 billion of inflows, while European domiciled ETFs received inflows of €1.4 billion. Equity ETFs received the lion’s share on both sides of the Atlantic, with US domiciled ETFs receiving over 90% ($12.8 billion) of inflows, while European domiciled ETFs received comparable interest (79%, €1.1 billion).
In Europe, European developed markets (DM) diversified equity benchmarks received 75% of the week’s total equity ETF cash flows (€829.5 million). This is a continuation of a trend we have noted in our August monthly report published on September 13th and titled Quest for yield: Dividends and corporate bond credit at the forefront . During August diversified European DM equity benchmarks received inflows of €702 million. YTD, ETFs that are benchmarked to European DM diversified indices have received €1.8 billion.
Last week’s European equity cash flows were strongly tilted towards EuroStoxx50 benchmarked ETFs (€493 million), while Stoxx 600 (€194 million) and MSCI Europe (€127 million) also received healthy interest. On the outflows front, DAX benchmarked ETFs continued to experience negative pressure and registered €149 million of outflows, bringing their YTD outflows to over a billion (€1.1 billion).
The European broad equity benchmarked ETF flow gains come on the back of positive market gains over the past week. The EuroStoxx 50 is up 15.7% YTD, up 5.0% in August and up 2.2% over the week that finished on September 14th. The STOXX 600 and the MSCI Europe indices have seen similar gains.
Fixed Income ETFs
Fixed income ETFs received €260 million of net inflows over the past week, the majority of which (€303 million) went to corporate bond benchmarked ETFs. High yield continued its run and attracted €176 million while investment grade benchmarked corporate ETFs received €127 million. US domiciled fixed income ETFs also received healthy flows totalling $1.4 billion.
Commodity ETPs
European domiciled commodity ETPs received €348 million for the week, with Gold ETPs gaining the lion’s share €251 million. This brings YTD gold inflows to €3.9 billion, making by far the most popular commodity with ETP investors. The price of gold ($/oz) rose by 2.1% over the past week, while it is up 12.5% YTD.
The following link will be available for 90 days. For more information, please click on the link for the full PDF.
If you have any trouble viewing the link, copy and paste the link in a browser.
http://pull.db-gmresearch.com/p/501-BDC4/6197795/Weekly_European_ETF_Market_Monitor.pdf
Source: Christos Costandinides, European Head of ETF Research & Strategy, Deutsche Bank
Deutsche Boerse, Unscheduled component change made to SDAX
Schuler AG to be replaced by SMT Scharf AG on September 24, 2012
September 19, 2012--Deutsche Börse today announced an unscheduled component change to the SDAX.
Schuler AG will be replaced by SMT Scharf AG in the index. Due to the takeover of Schuler AG by Andritz Beteiligungsgesellschaft, the company’s free float has dropped below 10 percent, making it ineligible for inclusion in the index.
The adjustment will become effective on 24 September 2012.
The next regular review of the Deutsche Börse equity indices is scheduled for 5 December 2012.
Source: Deutsche Börse
DB Global Equity Index and ETF Research-Europe-Weekly European ETF Market Monitor:European equity ETFs continue to attract strong interest
September 19, 2012--Equity ETFs: A market rally draws investors
Global ETF cash flow patterns for the week that finished on September 14th signal an improvement in equity market sentiment.
US domiciled ETFs received €14.2 billion of inflows, while European domiciled ETFs received inflows of €1.4 billion. Equity ETFs received the lion’s share on both sides of the Atlantic, with US domiciled ETFs receiving over 90% ($12.8 billion) of inflows, while European domiciled ETFs received comparable interest (79%, €1.1 billion).
In Europe, European developed markets (DM) diversified equity benchmarks received 75% of the week’s total equity ETF cash flows (€829.5 million). This is a continuation of a trend we have noted in our August monthly report published on September 13th and titled Quest for yield: Dividends and corporate bond credit at the forefront . During August diversified European DM equity benchmarks received inflows of €702 million. YTD, ETFs that are benchmarked to European DM diversified indices have received €1.8 billion.
Last week’s European equity cash flows were strongly tilted towards EuroStoxx50 benchmarked ETFs (€493 million), while Stoxx 600 (€194 million) and MSCI Europe (€127 million) also received healthy interest. On the outflows front, DAX benchmarked ETFs continued to experience negative pressure and registered €149 million of outflows, bringing their YTD outflows to over a billion (€1.1 billion).
The European broad equity benchmarked ETF flow gains come on the back of positive market gains over the past week. The EuroStoxx 50 is up 15.7% YTD, up 5.0% in August and up 2.2% over the week that finished on September 14th. The STOXX 600 and the MSCI Europe indices have seen similar gains.
Fixed Income ETFs
Fixed income ETFs received €260 million of net inflows over the past week, the majority of which (€303 million) went to corporate bond benchmarked ETFs. High yield continued its run and attracted €176 million while investment grade benchmarked corporate ETFs received €127 million. US domiciled fixed income ETFs also received healthy flows totalling $1.4 billion.
Commodity ETPs
European domiciled commodity ETPs received €348 million for the week, with Gold ETPs gaining the lion’s share €251 million. This brings YTD gold inflows to €3.9 billion, making by far the most popular commodity with ETP investors. The price of gold ($/oz) rose by 2.1% over the past week, while it is up 12.5% YTD.
The following link will be available for 90 days. For more information, please click on the link for the full PDF. If you have any trouble viewing the link, copy and paste the link in a browser.
http://pull.db-gmresearch.com/p/501-BDC4/6197795/Weekly_European_ETF_Market_Monitor.pdf
Source: Source: Christos Costandinides, European Head of ETF Research & Strategy, Deutsche Bank
FinTuition Releases White Paper on European ETFs, Liquidity, Securities Lending and Collateral
September 18, 2012--Roy Zimmerhansl of FinTuition and Andrew Howieson of Howieson Consulting announce the release of a ground-breaking white paper: "ETF Liquidity, Securities Finance and Collateral Management; Maximising the role of European Exchange Traded Funds".
Exchange Traded Funds (ETFs) listed in Europe have developed into a significant element of the European fund management industry. At June 30, 2012, 39 issuers listed 1,304 ETFs with assets under management (AUM) of €215 billion. The interactions between ETF investment and trading and securities finance/collateral management are complex and not always fully clear.
Market participants point to a relatively low level of liquidity in European ETFs as compared to the US ETF market and to potential linkages with the relative underdevelopment of securities finance and collateral management in relation to European ETFs.
view the ETF Liquidity, Securities Finance and Collateral Management-Maximising the role of European Exchange Traded Funds
Source: FinTuition
DB-Global Equity Index and ETF Research-Weekly European ETF Market Monitor
September 17, 2012--The most recent issue of the Weekly European ETF Market Monitor is now available. The report includes key statistics on the European ETF market as well as global ETF market highlights.
For more detailed coverage please refer to our monthly report, issued in the first week following the end of each month.
The following link will be available for 90 days. For more information, please click on the link for the full PDF.
If you have any trouble viewing the link, copy and paste the link in a browser.
http://pull.db-gmresearch.com/p/503-67DD/1814356/ETF_Research_-_Weekly_European_ETF_Market_Monitor.pdf
Source: Christos Costandinides, European Head of ETF Research & Strategy, Deutsche Bank
September 2012 Quarterly Review: Investors search for yield as rates drop further
September 17, 2012--Weak growth and portfolio reallocations driven by concerns about euro area sovereign risk, combined with central bank policy actions, pushed government bond yields to unprecedented lows.
And, as market participants searched for investment opportunities offering at least some yield, prices of equities and corporate bonds rose.
Cross-border lending by internationally active banks increased slightly in the first quarter, partly offsetting the sharp contraction in late 2011.
BIS economists Mathias Drehmann and Mikael Juselius show that recessions are likely to be deeper when a larger fraction of households' and firms' income is devoted to debt servicing. In addition, they show that a rapid increase in debt service costs (relative to income) raises the probability of a banking crisis.
Boris Hofmann and Bilyana Bogdanova of the BIS show that, since the early part of the last decade, policy rates in both advanced and emerging market economies have mostly been below the level implied by a simple Taylor rule.
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Source: BIS
ESMA consults on market maker and primary dealer exemption for short selling
September 17, 2012--The European Securities and Markets Authority (ESMA) has published a Consultation Paper on Exemption for market making activities and primary market operations under the Short Selling Regulation, which contains draft Guidelines on market making and the application of exemptions for market making activities and primary market operations under the Regulation.
The Guidelines are intended to support the creation of a level-playing field, consistency of market practices and convergence of supervisory practices amongst national securities market regulators across the EEA.
ESMA has previously alerted the market and securities markets regulators, on 30 August 2012, to the opening on 1 September of the notification period for the use of the exemption and indicated that today’s consultation paper should be used as the interim benchmark for the notification and application of the exemption.
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